In the world of payments rife with friction there is no such thing as a silver bullet Even when technologies come close to addressing multiple challenges that exist today when sending receiving and reconciling B2B payments those benefits typically come with a cost whether it be the interchange fees of cards or the burden of replacing legacy infrastructure Corporate payments have a particularly high barrier to overcome resistance to change Recent months have seen corporate payment heavyweights investing further into encouraging that change often promoting the use of virtual cards driving momentum for a payment technology that can tackle multiple points of friction in accounts payable AP at once The beauty of the virtual card is that its the only payment modality today that solves the four biggest challenges in the payment process speed good funds reconciliation and fraud risk explained Blair Jeffery chief operating officer at payments processing company Noventis Indeed these benefits are being highlighted in the context of B2B payments as issues like delayed supplier payments insufficient funds penalties challenges of reconciliation with manual data entry and rising losses linked to B2B payments fraud create even greater urgency for the industry to modernize According to Jeffery issues like bounced checks or non-sufficient funds NSFs linked to ACH can wreak havoc for the supplier side of the transaction Virtual cards on the other hand do not require the full funds to be in the senders account at the time of payment and vendors are not penalized if the sender cannot pay off the bill Of course theres the issue of lag time with checks that can be a significant pain point for suppliers and one that is immediately addressed for suppliers while still providing float for the payer In terms of reconciliation he explained virtual cards provide a unique number for each transaction enabling automated matching and reconciliation processes Finally virtual cards can address risks related to fraud that even ACH cannot tackle Storing ACH even routing or account numbers in ERP systems is incredibly risky he said Data breaches allow for your customers data to be captured and used The liability to a company for those breaches is high and getting higher every day Virtual cards meanwhile can be used only for certain transactions thus rendering a card virtually useless if stolen Noventis which announced last October that it would be acquired by commercial payments company WEX is now looking to introduce the virtual cards benefits to the real estate sector through a partnership with AP automation company Nexus Systems Its not the first time that Nexus has collaborated to promote virtual cards in the industry Last September the firm announced a deal with Visa that similarly focused on integrating virtual cards for the real estate industrys AP needs Together Noventis and Nexus will offer real estate businesses access to virtual cards integrated into their accounts payable for streamlined payments to vendors like utility companies or contractors Key to the collaboration is addressing some of the major pain points on the accounts receivable AR side said Jeffery including linking vendors with the data they need to manage and reconcile their transactions Yet the undeniable truth remains There is no silver bullet and that includes the virtual card In the case of B2B payments the biggest drawback with virtual cards is the cost for vendors to accept the tool ie the interchange fee No payment system is entirely impenetrable either so security risks remain According to Jeffery the benefits of virtual cards far outweigh the costs associated with the payment rail A single instance of check fraud that cheats a business out of tens of thousands of dollars will quickly recognize that the cost of accepting a virtual card is worth it yet adoption has a long journey ahead in the B2B payments realm One key area that Jeffery said needs improvement is straight-through processing STP which can accelerate payment processing times reduce interchange fees and limit fraud risks by streamlining the movement of data Furthering the current straight-through processing methodology will undoubtedly need to see innovation he said The current standards of STP are not straight-through for all parties the company that creates it has a major advantage Virtual cards have other areas to improve upon too like making it easier for vendors to retrieve payment card data and input that information into their own systems However as with so many other industries the real estate sector must press forward and digitize a survey released last year from MRI Software found nearly half of real estate companies continue to rely on paper and spreadsheets to manage properties So while virtual cards may address many points of friction for real estate firms AP processes the industry experiences the same hurdle as others when it comes to taking the leap toward digitization Anytime a process is changed augmented or eliminated there is hesitancy said Jeffery The real question is whether the efficiency improvements and value-adds outweigh that hesitancy LATEST INSIGHTS Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation thats reshaping the payments and commerce ecosystem Check out the latest PYMNTS Digital Drive Report accounts payable AP automation B2B B2B Payments corporate payments data fraud News Noventis Payment Methods real estate reconciliation risk suppliers virtual cards